Evolving Nutraceutical Business

Report Highlights

• The global nutraceuticals market grew to $46.7 billion in 2002, at an AAGR of nearly 7%.
• 2007 nutraceutical sales are projected to reach $74.7 billion at an AAGR of 9.9%.
• This assumes a world economic recovery in 2003 and an end to price competition.
• Sales could accelerate with the introduction of a “blockbuster” nutraceutical.

INTRODUCTION

Every year consumers around the world spend billions of dollars on nutraceuticals. Because the use of these products has become so widespread, there is a great need to develop an up-to-date information base for these products to better understand the dynamics of the market.

Nutraceuticals, also frequently referred to as “dietary supplements” or “nutritional supplements”, are essentially prophylactic or preventive, in contrast to drugs that are active chemical substances used to treat an illness or symptoms of an illness. Nutraceuticals represent a different approach to medicine, one based on nutrition and the health or wellness of the whole body. As such, while nutraceuticals may compete with or cannibalize the sales of certain types of drugs (particularly over-the-counter drugs), they form a distinct market.

Over the past few years, there have been major changes in the nutraceuticals market. Today, the nutraceuticals industry faces the biggest challenges of its relatively short life. Sales in key markets like the United States declined for the first time in 2001, and globally, the growth rate continued to slow in 2002. Regulators in a number of major markets also are wrestling with proposals for increased regulation of nutraceuticals that until now, have been subject to relatively lenient oversight.

This timely and comprehensive study provides the information and analysis needed to deal with these challenges. In addition to looking at future and current markets for a wide variety of new, reformulated and established products, the study analyzes technological, environmental, legal/regulatory and socioeconomic developments that may influence the market for nutraceuticals and dietary supplements.

In this report, BCC addresses the needs of decision-makers, and strategic planners, as well as marketers in the pharmaceutical and food industries, companies supplying bulk or formulated plant-derived drugs or companies planning to enter this field, medical research institutions and regulatory organizations.

SCOPE OF STUDY

This BCC study:

• Identifies and segments commercialized nutraceuticals and dietary supplements
• Analyzes the historical and current volume and value of product segments
• Evaluates the impact of factors that will drive future demand for nutraceuticals
• Forecasts the volume and value of product segments through 2007
• Assesses promising new products still in the development and testing stage
• Forecasts potential market for these developmental products
• Identifies leading manufacturers and potentially important players
• Assesses the long-term outlook for the nutraceuticals industry.

METHODOLOGY AND INFORMATION SOURCES

The findings and conclusions of this report are based on information gathered from producers and distributors of nutraceuticals and other informed sources. Interview data were combined with information gathered through an extensive review of secondary sources such as trade publications, trade associations, company literature, and on-line databases to produce the market estimates contained in this report.

At the time this report was prepared, year-end data for 2002 were not yet available. Market estimates for 2002 were developed using interim (partial) data for 2002 where available, combined with data for the year 2001 and, in a few cases, 2000. Wherever possible, historical data through the end of 2001 were used as the basis for analysis and projections. However, for certain market segments, specific data beyond 2000 were incomplete or unavailable at the time this report was prepared. In these cases, year 2000 data were used and documented accordingly. Our final analyses and projections are based on a combination of a consensus among the primary contacts combined with our understanding of the impact of trends from a historical and analytical perspective. The analytical methodologies used to generate the market estimates are described in detail in the section on Detailed Market Projections.

All dollar projections presented in this report are in 2002 constant dollars.

ANALYST CREDENTIALS

The author of this report is Andrew McWilliams. Mr. McWilliams, a partner in the Boston-based international technology and marketing consulting firm of 43rd Parallel LLC, is the author of several other Communications Company studies, including a forthcoming study of the global market for plant-derived drugs.